European integration

Basically, European countries are too small to survive as individual independent countries fighting economic war against each other. Eventually there has to be a united European superstate. A lot of British and Danish people, especially the UKConservative Party have a problem dealing with this reality.

In European Monetary Union, probably the next big step if the UK does integrate further into Europe, which was planned in the Maastricht Treaty and we had to opt-out of, there would be no change in exchange rates between us and the other countries. A very large proportion of our trade is with the present members of EMU, and exchange rates with them are very important to many UK businesses. These businesses productivity would be largely improved if they could predictcosts and revenues more accurately, as would be the case with fixed exchange rates. However, to achieve the same value of currency, it is likely that we would have to take the value of the pound down a long way, which would have mixed effects of the economy – making exporting easier but importing not so cost effective. It is also possible that in EMU, if we needed to adjustfiscal policy – put up interest rates in response to high inflation for example – we would not be allowed to, as it would often be at the expense of other EU economies. We can see this problem arising in The Republic of Ireland at the moment – their economy has been doing especially well due to EU money, but now, as members of EMU, they do not have the power to increase interest rates to stop inflation rising.

Further loss of sovereignty to the European Union also has debatable good and bad points. The European Court’s powers to issue warnings and sanctions against us for breaking with EU legislationprotects us in two ways. Firstly, and most likely to be of use to us, we are protected against other EU countries behaving unhelpfully towards us, in any respect. Decisions taken by Europe of this kind, overriding the sovereignty of national Governments can, of course, go for and against us. For this reason, Europhiles – pro Europe politicians – often prefer to describe the transfer of power as a ‘Pooling of sovereignty’ rather than a loss. We get some power over other countries, while they get a little power over us. Secondly, the Court’s power over our Parliament Acts, in a way, as a constitution, protecting the people by limiting governments with too much power. It would act against any government that was unacceptable, for example the far rightFreedom Party, which on joining a coalition government in Austria caused the EU to take serious sanctions against the country.

Following World War Two, the European nation-state needed rescuing. Although political continuity was mostly provided by the return from exile of pre-war governments, the legitimacy of the traditional form of the European nation-state was at risk. Most having failed from defending their citizens from occupation during the war, it was questionable whether a return to the status quo ante bellum was the best route to take. On the domestic front, stability needed to be provided for so that a mass movement could not displace parliamentary democracy. In foreign affairs, it was necessary to fashion an international system which would discourage aggression by any one nation-state in Europe. In the minds of many, this entailed finding a solution to the 'Franco-German problem'. With radical politics discredited by the World War and the onset of the Cold War, a post-war political consensus was reached on the task of the state.

To maintain legitimacy it began to take on the burden of increased interference in the economic sphere, as well as the provision of a welfare state which would give more people a stake in society. But providing stability in this way came at a price, which it was believed could be defrayed by European integration. By acting in concert states could better achieve the economic growth that became one of their main tasks, and also tie themselves closer together so as to make aggression unlikely. European integration did not on its own 'rescue' the nation-state, but was one factor in ensuring its stability in the post-war period. The state was not undermined insofar as European unity strengthened rather than weakened it, although trouble could come if states became too heavily reliant on others and lost control.

The post-war nation-state was very sensitive to the need to stabilise the economic system and prevent a recurrence of the Great Depression, particularly mass unemployment. Especially important after the Treaty of Rome was the stabilisation of agricultural prices in the long-term, as agrarian unrest was seen as a large contributing factor to the mass movements that pre-dated the war. The state hence had to take on more responsibility than ever before, for it was charged with maintaining economic growth and running a welfare system to provide support to those who 'fell through the cracks'. Nations chose to internationalise an issue when it helped them domestically to do so, and resisted it where it would be inimical to their interests.

There was no new feeling of altruism among the European nation-states, rather a belief that co-operation would be mutually beneficial. The economic reasons that Schuman proposed the European Coal and Steel Community were to provide markets for France and as a precedent for later integration. West Germany (FDR) was crucial to this process. As the fastest growing and most quickly modernising economy in Europe, the FDR was a crucial export market for the six countries that originally signed the Treaty of Rome. Because West Germany was a source of demand for industrial goods, it was an impetus to modernisation and industrialisation among the other countries of Europe. The creation of the EEC hence helped the efficient allocation of resources within the economies of the members, hence being a stimulant to economic growth and long-term development.

Doubtlessly the massive surge of economic growth that Europe underwent in the period 1945 – 68 was not caused by integration. New economic orthodoxies, Marshall aid, the classification of the radical Left as pathological, and low labour costs allowing capital investment all contributed. But were it not for the integration of the FDR, with its massive growth potential, into this system, then the surge could not have been so dramatic. American willingness to take on the burden of the FDR’s reparations and deficit were posited on the hope that its rearmament was possible within a European framework. If the European nation-state wanted American help to get back on its feet, then it had to keep its side of the bargain.

This is why the USA threatened France with a negative reappraisal of policy if they refused to back the European Defence Community over fears of German rearmament. U.S. Secretary of State Dean Acheson bluntly told the UK and France that the USA would not reinforce its own European forces without a contribution from west Europe, including rearmament of the FDR. There were two sides to the issue of German rearmament. One was the supranational one, the fact that German rearmament would make Western Europe safer as a whole to outside attack. The other was the national one, the fact that none of Germany’s neighbours were happy about her rearmament so soon after the war. The primacy of national concerns in European integration, i.e. the desire to strengthen one’s own nation-state, was shown by French opposition to the plan. France feared German power over it, just as the ECSC had been a way of trying to gain influence over the nascent West German state.

Agriculture became an international priority after the Treaty of Rome, which merely provided a vague framework for a common agricultural policy. The mass movements of the inter-war period drew a lot of support from agrarian society, which was experiencing a rapid decline in its real incomes, especially vis-à-vis manufacturing. It was hoped that by maintaining incomes in the agricultural sector immediately after the war that this could be avoided, while labour would slowly atrophy into other sectors and make agriculture more efficient. Belgium joined the ECSC to save its coal industry in a similar way. Once this policy was in place, states could not remove it without endangering the political consensus. Although the agricultural sector was in decline, the CAP was launched before this decline was complete and took on an impetus of its own. Agricultural production came to be seen as a good in itself, and the agrarian sector was assured of its prosperity more than ever before.

Whether agricultural instability would have been a serious threat to the nation-state by the time the CAP was actually launched is debatable, but it has at least provided stability at a price – approximately half of the EU's budget today. Modernisation would necessarily be disruptive to agrarian society, and this threat has at least largely passed. Whether this was a result of the internationalising of the issue is debatable, as individual states were providing support to about three quarters of Western European farmers before the CAP, and agriculture was excluded from EFTA. But agricultural integration was a spur to further political integration, because the one without the other could be dangerous: states might become unable to feed themselves as well as before.

Just because nation-states only engaged in integration when they believed it would strengthen their position, is not to say that it actually did so. Nor should the remarkable stability and economic growth of the post-war period necessarily be attributed to integration. But the rescue of the European nation-state that resulted from these two factors was encouraged by the process of integration. As each state retained the capacity for independent action within the system as the supranational element was never allowed to get too strong, states were sure to make sure they were not undermined. Economically, the six who formed the ECSC and later the EEC tended to perform better than those countries not inside. Despite EFTA, Britain registered particularly sluggish rates of growth when compared to the Six. Integration also had a political dimension that benefited those inside. As well as tying German economic dynamism to a more benevolent system than those that had been sought in the last two world wars, France and West Germany became fundamentally tied together in the coal and steel sectors. This would make a war between the two extremely difficult, and hence provide stability to the region. This economic framework was seen as a precursor to a more all-embracing political co-operation, and Franco-German relations did improve across the period. The reintegration of the Saar into Germany, which was a thorny issue in Franco-German relations, was speeded up by the desire for integration. This made European nation-states stronger because it made an implosion of the sort seen in the World Wars more unlikely.

European integration helped to rescue the nation-state, but was not alone in doing so. It allowed greater scope for action beyond the normal national sphere, fostered a spirit of co-operation that encouraged nations to act for their mutual benefit, and helped to underpin the economic growth now essential to political consensus. Difficult economic transitions were eased were the resources of all were brought to bear in regional policy, which helped the nation-state retain its legitimacy and avoid social turmoil. The supranational body could even be blamed for any failures, although in reality the supranational element was not very powerful when compared to the national one. Hence the states had gained a scapegoat and a useful tool at once.

Integrating West Germany into a friendly Europe had both economic and political benefits, for it underpinned economic growth and made the FDR becoming hostile less likely. Democracies, which rarely make war with each other, were encouraged to emerge as been a member of the European comity required a liberal government, which would gradually spread to the anachronistic authoritarian regimes in Southern Europe. The European nation-state became stronger by working with others because each one kept its own interests at heart, while always seeing how it could co-operate with the others for mutual gain. Failed attempts to integrate defence and foreign policy – which would always require probably an unacceptable surrendering of sovereignty – should not mask the fact that much was achieved in the economic sphere. Both spurs to continued economic growth and assurances of peace between Germany and her neighbours were the product of European integration, and these helped put the nation-state back on a firm footing.

Complete bibliography

A.S Milward, The European Rescue of the Nation State
D. Urwin, The Community of Europe
D. Urwin, A Political History of Western Europe Since 1945
R.F Kinsel, Capitalism in Modern France
F. Giles, The Locust Years: the story of the French Fourth Republic
C.S. Maier, ‘The two postwar eras and the conditions of stability in 20th century Europe’ in idem, In Search of Stability
A. Deighton (ed.), Building Postwar Europe